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Reading: Barry Eichengreen (2011): Economic History and Economic Policy via Brad DeLong
Barry Eichengreen (2011): Economic History and Economic Policy - EHA Presidential Address 2011
As you read, formulate your answers to the following questions:
1. What does Eichengreen think are the uses of history, as shown in the use of history in trying to understand the macroeconomic crisis that began in 2008?
2.What does Eichengreen think are the abuses of history, as shown in the use of history in trying to understand the macroeconomic crisis that began in 2008?
3.What rules and approaches does Eichengreen arrive it for future people trying to use history better?
Downloaded via iPhone to DBOX
monetary_policy  historiography-postWWII  QE  fiscal_policy  unemployment  historiography-19thC  economic_history  economic_policy  Keynesianism  speech  FX-rate_management  downloaded  central_banks  Great_Depression  historiography  FX  austerity  financial_system  financial_crisis  financial_regulation  Minsky  historiography-20thC  FX-misalignment  Great_Recession  inflation 
january 2017 by dunnettreader
Barry Eichengreen - The Political Economy of the Smoot-Hawley Tariff (1986) - NBER
The Political Economy of the Smoot-Hawley Tariff
Barry Eichengreen
NBER Working Paper No. 2001
Issued in August 1986
NBER Program(s):   ITI   DAE   IFM
Economic histories of the interwar years view the Great Depression and the Smoot Hawley Tariff as inextricably bound up with one another. They assign a central role to the Depression in explaining the passage of the 1930 Tariff Act and at the same time emphasize the role of the tariff in the propogation of the Depression. This paper argues that popular accounts have conveyed what is at best an incomplete and at worst a misleading impression of the relationship between the tariff and the Depression. Rather than simply strengthening the hand of a Republican Executive predisposed toward protection or increasing the burden borne by a depressed agricultural sector, the uneven impact of the Depression occasioned the birth of a new protectionist coalition comprised of producers particularly hard hit by import competition: border agriculture and small-scale industry engaged in the production of speciality goods. Rather than leading to a dramatic across-the-board decline in the volume of U.S. imports, the tariff had very different effects across sectors. Rather than worsening the Great Depression by reducing foreign demands for U.S. exports, the direct macroeconomic effect of the tariff is likely to have been expansionary. This remains true even when feedbacks to the United States and foreign retaliation are analyzed. In any case, relative to the Depression, the direct macroeconomic effects of the tariff were small. If Smoot-Hawley had significant macroeconomic effects, these operated instead through its impact on the stability of the international monetary system and the efficiency of the international capital market.
competition-interstate  trade-agreements  economic_history  Great_Depression  NBER  trade  trade-policy  protectionism  economic_theory  20thC  entre_deux_guerres  revisionism  paywall  paper  Smoot-Hawley  race-to-the-bottom 
october 2016 by dunnettreader
How I learnt to love the economic blogosphere
July 27, 2016 | FT.com | Giles Wilkes.

Marginal Revolution
Econlog
Cafe Hayek
Stumbling and Mumbling
Brad Delong
Nick Rowe - Worthwhile Canadian Initiative
Steve Randy Waldman - Interfluidity
Slack Wire - JW Mason

"Sympathetic opinions coalesce in clusters of mutual congratulation (“must read: fellow blogger agreeing with my point of view!”). Dispute is often foully bad-tempered. Opposing positions are usually subject to a three-phased assault of selective quotation, exaggeration and abuse.'..."Lacking an editor to roll their eyes and ask what’s new, many writers soon become stale... Editors exist not only to find interesting pieces to publish but also to hold at bay the unstructured abundance of bilge that we do not need to read."....."...nothing as reliably good as the (eonomics) blogosphere. Some of its advantages are simply practical: free data, synopses of academic papers that the casual dilettante is unlikely to ever come across, a constant sense of what clever people are thinking about. But what is better is how its ungated to-and-fro lets a reader eavesdrop on schools of academic thought in furious argument, rather than just be subject to whatever lecture a professor wishes to deliver. No one learns merely by reading conclusions. It is in the space between rival positions that insight sprouts up, from the synthesis of clashing thoughts. Traditional newspaper columns are delivered as if to an audience of a million, none of whom might reply. The best blogs are the opening salvo in a seminar rather than the last word on the matter. They dumb down less "....."Ancient thinkers such as Adam Smith, John Maynard Keynes and Iriving Fisher were deployed not as some sort of academic comfort blanket but because their insights are still fresh, and beautifully written."..."Reading the economic blogosphere in 2008 felt to me like the modern equivalent of watching Friedrich Hayek, Keynes and Friedman quarrelling in front of a graduate class about how FDR should react to the depression. "...."Interfluidity is where to find such brilliancies as “the moral case for NGDP [Nominal Gross Domestic Product] targeting”, a political look at a seemingly technical subject, and “Greece”, a furious examination of how the term “moral hazard” is being traduced in the euro crisis. "..."Waldman’s thoughts go far beyond such a crude duality. After a long discussion of measurement problems, the institutional constraints on innovation and much more, he zeroes in on how governments build institutions to handle the disruption wrought by technological change. In a few hundred words he flips around Cowen’s stance and, instead of looking at the growth of government as the problem, makes a case for its opposite. Technological change creates concentrations of power, which “demands countervailing state action if any semblance of broad-based affluence and democratic government is to be sustained”. We have always needed institutions to divert spending power to those left behind, otherwise social disaster beckons. "....When reading, look for sources with something new to say!
economics  economists  blogosphere  Tyler_Cowen  Paul_Krugman  Adam_Smith  information_overload  social_media  Brad_Delong  blogs  Friedrich_Hayek  Milton_Friedman  political  economy  editors  tough-mindedness  FDR  Great_Depression  insights  John_Maynard_Keynes  sophisticated  disagreements  argumentation  technological_change  moral_hazards  policy_innovation 
july 2016 by jerryking
FRB: FEDS Notes: Government-Backed Mortgage Insurance Promoted a Speedier Recovery from the Great Recession
URL is for Fed Note that summarizes one part of the larger Paper - April 2016 -- Government-Backed Mortgage Insurance, Financial Crisis, and the Recovery from the Great Recession (PDF) -- Wayne Passmore and Shane M. Sherlund -- Abstract: The Great Recession provides an opportunity to test the proposition that government mortgage insurance programs mitigated the effects of the financial crisis and enhanced the economic recovery from 2009 to 2014. We find that government-sponsored mortgage insurance programs have been responsible for better economic outcomes in counties that participated heavily in these programs. In particular, counties with high levels of participation from government-sponsored enterprises and the Federal Housing Authority had relatively lower unemployment rates, higher home sales, higher home prices, lower mortgage delinquency rates, and less foreclosure activity, both in 2009 (soon after the peak of the financial crisis) and in 2014 (six years after the crisis) than did counties with lower levels of participation. The persistence of better outcomes in counties with heavy participation in federal government programs is consistent with a view that lower government liquidity premiums , lower government credit-risk premiums, and looser government mortgage-underwriting standards yield higher private-sector economic activity after a financial crisis. - Keywords: Financial crisis, Great Recssion, government policy, mortgages - paper downloaded to Tab S2
paper  Fed  Great_Recession  Great_Depression  housing  mortgages  financial_crisis  GSEs  securitization  unemployment  house_prices  countercyclical_policy  downloaded 
july 2016 by dunnettreader
Michael Pettis - Economic consequences of income inequality - March 2014
Back to basics and the undercinsumption model that shows why it's necessary to save capitalism from itself -- I will again quote Mariner Eccles, from his 1933 testimony to Congress, in which he was himself quoting with approval an unidentified economist, probably William Trufant Foster. In his testimony he said:

It is utterly impossible, as this country has demonstrated again and again, for the rich to save as much as they have been trying to save, and save anything that is worth saving. They can save idle factories and useless railroad coaches; they can save empty office buildings and closed banks; they can save paper evidences of foreign loans; but as a class they cannot save anything that is worth saving, above and beyond the amount that is made profitable by the increase of consumer buying.

It is for the interests of the well-to-do – to protect them from the results of their own folly – that we should take from them a sufficient amount of their surplus to enable consumers to consume and business to operate at a profit. This is not “soaking the rich”; it is saving the rich. Incidentally, it is the only way to assure them the serenity and security which they do not have at the present moment.
trade-policy  Great_Depression  china  economic_history  Eurozone  international_political_economy  EF-add  savings  Great_Recession  investment  Germany  global_economy  trade-theory  economic_theory  unemployment  consumer_demand  inequality 
april 2016 by Werderbach
Price V. Fishback - How Successful Was the New Deal? The Microeconomic Impact of New Deal Spending and Lending Policies in the 1930s | NBER January 2016
NBER Working Paper No. 21925 -- The New Deal during the 1930s was arguably the largest peace-time expansion in federal government activity in American history. Until recently there had been very little quantitative testing of the microeconomic impact of the wide variety of New Deal programs. Over the past decade scholars have developed new panel databases for counties, cities, and states and then used panel data methods on them to examine the examine the impact of New Deal spending and lending policies for the major New Deal programs. In most cases the identification of the effect comes from changes across time within the same geographic location after controlling for national shocks to the economy. Many of the studies also use instrumental variable methods to control for endogeneity. The studies find that public works and relief spending had state income multipliers of around one, increased consumption activity, attracted internal migration, reduced crime rates, and lowered several types of mortality. The farm programs typically aided large farm owners but eliminated opportunities for share croppers, tenants, and farm workers. The Home Owners’ Loan Corporation’s purchases and refinancing of troubled mortgages staved off drops in housing prices and home ownership rates at relatively low ex post cost to taxpayers. The Reconstruction Finance Corporation’s loans to banks and railroads appear to have had little positive impact,although the banks were aided when the RFC took ownership stakes. -- paywall on SSRN
paper  SSRN  paywall  economic_history  20thC  Great_Depression  New_Deal  entre_deux_guerres  Keynesianism  housing  mortgages  banking  agriculture  demand-side  government-roles  government_finance  microeconomics 
february 2016 by dunnettreader
The Life of A Song: Good Times
February 5, 2016 | FT|

Chic’s last-gasp salute to disco was inspired by the Great Depression and the Harlem Renaissance
music  '70s  disco  African-Americans  Harlem_Renaissance  Great_Depression 
february 2016 by jerryking
Canada beware: We are suffering a great depression in commodity prices - The Globe and Mail
MICHAEL BLISS
Special to The Globe and Mail
Published Friday, Jan. 15, 2016

The Great Depression of the 1930s used to be understood as a worldwide structural crisis that was partly an adjustment to the great expansion of crop acreage and other primary industries undertaken to meet the demands of the First World War. Unfortunately the history of those years now tends to be viewed through the distorting lenses of economists fixated on monetary policy and financial crisis management.

They thought that the crisis of 2008 might become a replay of the 1930s. For the most part they have not realized that it is today’s global depression in commodity prices that has eerie echoes of the great crack-up. If it’s true that we have overexpanded our productive capacity to meet the demands of Chinese growth, and if that growth is now going to slow, or even cease, then history is worrisomely on the verge of repeating itself....One sign of the beginning of wisdom is to be able to shed illusions. Make no mistake. Right now, the world is experiencing a great depression in commodity prices, led by the collapse of oil, that represents an enormous shrinkage in the valuation of our wealth. As a country whose wealth is still highly dependent on the returns we can get from selling our natural resources, Canada is very vulnerable. In a time of price depression, our wealth bleeds away.
'30s  adjustments  commodities  commodities_supercycle  economic_downturn  Great_Depression  historians  history  illusions  Michael_Bliss  natural_resources  overcapacity  pricing  overexpansion  slow_growth  wisdom  WWI 
january 2016 by jerryking
Jeet Heer - Sex, Economics, and Austerity | The American Prospect - 2013
John Maynard Keynes was the sexiest economist who ever lived. This might seem like half-hearted praise since in our mind’s eye the typical economist appears as… On the decades of right-wing attacks on Keynes and Keynesianism using sexual "immorality" as linked to purported moral failings of Keynes' policy responses from Versailles onward.
article  Instapaper  intellectual_history  intellectual_history-distorted  20thC  21stC  Keynes  Keynesianism  economic_history  economic_theory  macroeconomics  Great_Depression  right-wing  neoconservatism  fiscal_policy  budget_deficit  austerity  economics-and-morality  from instapaper
august 2015 by dunnettreader
David Glaser - Exposed: Milton Friedman’s Cluelessness about the Insane Bank of France | Uneasy Money - July 2015
About a month ago, I started a series of posts about monetary policy in the 1920s, (about the Bank of France, Benjamin Strong, the difference between a… -- excellent post that gives helpful explanation of what and why the Vanque de France was doing vacuuming up the world's gold supply, and how Friedman’s reading office the memoirs of the head of the Banque de France was so distorted by his worldview that he totally missed what was said and, in the intro to the English translation, totally misrepresented or whizzed by the critical bits in the memoirs, which are quite clear on what the Banque de France was doing, which totally explodes Friedman’s interpretation of the world-wide Great Depression as the fault of the Fed to "follow the gold standard rules" -- though Friedman acknowledges that in re-reading the memoirs in translation he finds that the French shared some of the blame, (1) he misses that France's inporting of gold was an order of magnitude greater than the US, and (2) totally misunderstands the operation of the gold exchange standard. He's ssuming a vulgar version of the price-specie flow mechanism of under and over-valued, as measured solely by the US bilateral trade with the UK rather than price levels relative to the global gold price, (3) assumes that domestic prices were being adjusted by domestic monetary policy, whereas it was prices relative to the international price of gold, rather than the domestic quantity of money, that was doing the work -- so the global increase in gold price engineered primarily by the "insane Banque de France" (with the US Fed as only a minor accomplice) had globally catastrophic deflationary effects.
economic_history  entre_deux_guerres  Great_Depression  central_banks  gold_standard  monetary_policy  monetary_theory  Friedman_Milton  international_monetary_system  French_politics  from instapaper
july 2015 by dunnettreader
Roger Backhouse, Mauro Boianovsky - Secular Stagnation: The History of a Macroeconomic Heresy :: SSRN - May 5, 2015
Roger Backhouse, University of Birmingham - Department of Economics -- Mauro Boianovsky, Universidade de Brasilia. *--* This paper covers the history of secular stagnation from Alvin's Hansen's AEA Presidential address in 1938 to the recent re-discovery of the idea by Lawrence Summers. It is argued that the story of secular stagnation is more complicated than the simple version usually told: the theory changed in ways that meant that, though its immediate relevance might be less, postwar prosperity left open the possibility that it might one day become relevant. It is also pointed out that the history of the term has never been free of political concerns, and it is suggested that changing conceptions of economic theory played an important role in the fate of secular stagnation -- Pages in PDF File: 36 -- Keywords: secular stagnation, unemployment equilibrium, Keynesian economics, Hansen -' downloaded to Note
paper  SSRN  economic_theory  intellectual_history  economic_history  US_economy  US_politics  20thC  Great_Depression  post-WWII  Keynesianism  stagnation  macroeconomics  institutional_economics  prices  competition  deficit_finance  downloaded 
may 2015 by dunnettreader
Robert Skidelsky - Universal Man: The Seven Lives of John Maynard Keynes review – more than the sum of its parts - March 2015
I admit I came to Universal Man: The Seven Lives of John Maynard Keynes with a certain prejudice. I knew Richard Davenport-Hines as an accomplished writer and biographer. But he has no background in economics. How could he write a successful life of the most fascinating and influential economist of the 20th century, the economist who gave governments the tools to fight slumps? (Not that they always use them!)
books  reviews  biography  Keynes  20thC  British_history  economic_history  Great_Depression  Bretton_Woods  cultural_history  capitalism  Skidelsky  Pocket 
april 2015 by dunnettreader

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